Arizona Real Estate License Practice Exam 2026 - Free Real Estate Practice Questions and Study Guide

Question: 1 / 1505

A borrower with a credit score below which figure is generally considered a higher risk for lenders?

600

A borrower with a credit score below 600 is generally considered a higher risk for lenders because credit scores serve as a reflection of a borrower's creditworthiness and financial behavior. A score below this threshold suggests a history of missed payments, high debt levels, or other negative financial events which can signal to lenders that the borrower may struggle to repay loans.

Lenders typically classify credit score ranges to evaluate risk levels—scores below 600 are often categorized as "poor" or "subprime." This classification influences loan approvals, interest rates, and the terms offered to the borrower. As credit scores increase, the perceived risk decreases, leading to better loan options. Higher scores, such as 650, 700, or 750, indicate a more reliable borrower likely to manage debt responsibly, making it less likely for lenders to view them as a high-risk investment.

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650

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750

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